Case Study: OfficeMax
This assignment focuses on case study analysis, where we were expected to analyse and provide executable strategy for a specific corporate retailer. The 1997 case relates to OfficeMax, a superstore that primarily carries office equipment and supplies to small business and consumer markets. However, the company is seeking diversification and market share growth, with the prospect of a merger between the industry’s number 1 and 2 office supply superstores, Office Depot and Staples. The current merger process is under scrutiny from industry watchdogs, and the role of these entities relative to the competitive advantage of retailers is being questioned. This document hence deals with strategic direction for OfficeMax in light or in spite of the proposed merger, as well as general recommendations that it may use to become the dominant player in the US office supply market.
Analytical Strategic Analysis
2.1 Selection of Tools
Strategic management is a continuous process, run throughout a business’s existence. The process is set out with periodic milestones at which the planning, executing and measuring of Critical Success Factors (CSFs) and business objectives are set. It is used to ensure that the business is able to select, collect, assimilate and use appropriate information so that an organisation can specify and communicate its mission, vision, policies and plans, relative to the external forces that may help or stifle drive growth. Further, the strategic management process allows an organisation to set its competitive positioning, and encourage innovation. Business Planning is concerned with how a business competes successfully in a particular market. The external environmental analysis (PESTLE) and industry analysis (including Porter’s Five Forces, competitor analysis and market performance analysis) models are applied by companies to identify opportunities and threats residing within the industry. A situation analysis is developed to culminate in a SWOT for internal positioning, relative to the strategic intent for growth for the company under analysis. This may be shaped more realistically with key success factors.
Figure 1: Strategic Management Process Thereafter, business planning concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc. During business planning, organisations tend to select either one or combination of Porter’s generic competitive strategies. This selection may be based on the particular market segment an organisation enters; hence, one organisation may have select different approaches if it plays in multiple segments. This culminates in Critical Success Factors (CSF’s) required for a company to assume an effective competitive position within its industry.
The environment analysis was conducted from Internet sources relating to mostly the United States for the period 1988‐2000. This information is summarised in Table 1. Table 1: PESTLE Analysis: Office Supply Industry Political 1988‐1992 Gulf War Panama / Cuban Conflict Bush Admin Increased Taxation Era of corporate reorg Unemployment rate unstable High inflation Decline in Specialist Stores HRM ‐ Employee as person 1992‐1996 Stability ‐ Economic Growth Focus internally Clinton Admin Contemporary Era Growth dotcom era grows Warehouse Clubs Confidence in Government 1996‐2000 Global positioning Bilateral, Iraqi and EU neg Clinton Admin Globalisation starting up Door‐to‐door courier preferred